The BBC's Nick Hawton reports on efforts to rebuild Bosnia-Hercegovina after the 1992-1995 Balkans war, ahead of landmark local elections this weekend.

"There are just no jobs and no money in this country," says Samir Begovic, 26, as he queues for a work visa outside the Austrian embassy in Sarajevo.

Signs of war damage in Sarajevo are fast disappearing

"The only opportunities are abroad. I want to get a job in the forestry industry in Austria."

It is the second time he has made the 500-km (310-mile) round-trip from his home town near Bihac, in north-west Bosnia.

The first time he was refused a visa.

"I am not giving up. I might get lucky this time," he says, more in hope than in expectation.

Samir is just one of hundreds of people who queue up every morning outside the Austrian, German and other embassies hoping to get that magic visa to take them away from Bosnia.

'Burning problem'

According to official statistics, unemployment is hovering at around 40%. The United Nations Development Programme (UNDP) calls it "the burning problem of the Bosnian economy".

In its 2003 annual report on Bosnia, the UNDP predicts a further rise in unemployment this year, stating that the process of economic reform could be "overshadowed by the social consequences of unemployment".

But despite the gloomy picture, Bosnia has moved on from the dark days of the 1992-95 Balkans war.

Many families depend on casual work to survive

Major infrastructure improvements have taken place.

War damage in Sarajevo, so evident just a couple of years ago, is fast disappearing.

In cities, especially the capital, new buildings are springing up.

Sarajevo's famous twin towers, left as burnt-out shells at the end of the three-and-a-half-year siege of the city, have been rebuilt and now play host to exclusive shopping arcades.

This summer, there have been major road works across the country, resurfacing roads left potholed and crumbling from the war a decade ago.

Stability

"The economic situation is simply unrecognisable since the mid-1990s," the chief international envoy to Bosnia, Lord Paddy Ashdown, told BBC News Online.

"For the past four years, we have had steady GDP growth of around 5%. The Bosnia currency remains the most stable currency in the Balkans; inflation is near zero and the most recent figures show investment and economic activities are rising faster than predicted - though still not fast enough," he says.

More than $5bn have been pumped into Bosnia since the end of the war.

The World Bank recently announced that Bosnia had now officially moved from a post-conflict to a transitional country.

Not everyone has profited from regeneration

Just this September, an international donors conference pledged another $1bn to encourage further development.

The UNHCR has just announced that more than one million people made refugees during the war have returned home.

But big challenges lie ahead.

The country remains deeply politically divided between its Bosnian Serb Republic and the Muslim-Croat Federation.

Despite efforts to build up the powers of the central state, both regions are still highly autonomous, with separate political, police and financial structures.

"Bosnia has moved on," says the World Bank's Srecko Latal in Sarajevo.

"But more reforms are needed. The country has to be able to attract foreign investment. To do that, the business environment has to improve. For instance, the cost of setting up new businesses and the bureaucracy associated with it, has to be reduced."

There is no doubt the country is in far better economic condition than in the immediate aftermath of the war.

But many people, especially the young like Samir Begovic, perceive little future for themselves in a country without jobs.